Letter from the Publisher: Why are social purpose organizations and their funders so uncomfortable talking about wages?

This year I’ll take home a bit over $90,000 in annual salary. 

Last year, the 3rd year for Future of Good, I took home about $75,000. The year before that, I took home $24,000 as an annual salary and lived off my partner’s income. In our first year, I didn’t take a salary, struggled to pay bills and used a line of credit to cover essential costs. 

It’s super uncomfortable, vulnerable, and embarrassing to share how I lived, and what I took home in our first couple of years, but we’re a social purpose startup and mine is a typical journey for founders.

But is this narrative — ”It sucks, but it’s typical” — a cop-out?

Cop-out or not, it’s the unfortunate reality for a significant number of social purpose organizations from coast-to-coast-to-coast, no matter their age, for all their workers. There is no shortage of data to show that a significant number of social purpose organizations are scraping by just to keep their work going — taking money out of frontline services to pay utility bills, or unable to pay any staff sick leave or offer health benefits, or secretly shifting program budgets around to add a bit more to ‘overhead’. And that’s not to mention, a number of social purpose organizations simply cannot pay their staff a living wage. At a time when the country is experiencing inflation up near a 40-year high, this is unacceptable.

Wages are the biggest systemic issue that no one in the social impact world wants to talk about or hear about.

Between the pre-COVID affordability crisis across the country, the income crunch of the pandemic and pressures of cost of living increase due to inflation, wage has become the biggest elephant in the room.

We changemakers, we’ve cleverly masked the wage issue for years, distracted ourselves from talking about it or tackling it — by talking about related things, like lack of core funding. And by core funding, I mean unrestricted funding for operational expenses.

Yes, core funding is a significant problem for social purpose organizations.

But the deeper systemic problem is wages.

Wage is perhaps the most taboo topic in the social impact world. And more core funding won’t solve the wage equity problem unless funders, donors, boards and team leaders intentionally name and acknowledge the wage issue and tackle it head on.

Imagine Canada recently released a revealing report on improving working conditions in Canadian non-profits. Some of the statistics are heart-breaking.They’re what every changemaker already knew, in a way, but we’re now seeing it as cold, hard evidence. 

The one finding that was alarming for me: The average annual salary for those working in community non-profits is approximately $38,000 — well under the $57,000 average in the overall economy.

Women, non-binary and racialized people working in social purpose organizations are hit even harder, and the wage data in the report illustrates deep discrepancies. Although women make up more than three-quarter of the sector’s workforce, and racialized people are almost half of the sector’s workers (not in executive roles, though, let’s be clear), they don’t have equal pay.

The gaps are creating haves and have-nots in the world of doing good. 

Imagine Canada’s report is titled ‘Diversity is our strength’ but as an immigrant and racialized person, let me tell you, very few organizations are actually valuing this diversity. (As an adjacent but related point, the report’s title feels like a form of gaslighting. To say that diversity is our strength implies that women, gender-diverse and racialized workers feel strong in the sector and aren’t facing systemic and structural discrimination — including wage gaps — daily. But they do.) 

Anecdotally, in my calls with hundreds of changemakers over the past few years, I’ve also discovered that a number of social purpose organizations have wage ratios of 10:1 or 15:1, even 25:1 between the highest paid employee and lowest paid employee. That means in some cases, the highest paid full-time worker is taking home 10 or 20 times what the lowest paid worker takes home. There are organizations that give full health benefits to executives but not to lower paid staff or contract workers. All of this is absurd in normal times but in a period of massive inflationary pressure, it’s nothing short of outrageous. At Future of Good, we’re still a young organization finding our way but all our staff, including part-time workers have health benefits, and our ratio between highest and lowest full-time paid workers cannot exceed 3:1.

Decades of funders not knowing the true cost of programs or services they fund, combined with absurd expectations and pride in ‘doing more with less’, as well as systemic and structural racism, sexism and wage discrimination have brought us this mess. 

As uncomfortable as it is for me to know that now tens of thousands of changemakers reading this now know the salary I take home and used to take home, this is precisely the discomfort and transparency that is necessary for the wage issue to be addressed. 

Given the dual pressures of wages and inflation, sector network organizations like Ontario Nonprofit Network, Calgary Chamber of Voluntary Organizations and sub-sector networks like the Alberta Council of Disability Services have conducted research that show community services and programs are at risk of pausing or closing within the next year.

Future of Good reporter Shannon VanRaes has been diving into the pressure of inflation, wage gaps, and the cascading effects for the sector and on communities for months now, analyzing data, speaking with funders, fundraisers, community organizations, researchers and workers. 

The culmination of all this is a new in-depth special report on the effects of inflation and the wage crunch on social purpose organizations. It’s one of the most extensive special reports we’ve ever undertaken at Future of Good. 

The opening story is a data story that explains and paints a picture of how the effects of inflation are being experienced in social purpose organizations. Shannon’s reporting is deeply revealing and will inform and enrich you, your team and your board with valuable perspectives and insights. I encourage you to read this story and follow the special report over the next few weeks.

Here’s to stories that move us forward,

Vinod Rajasekaran
Publisher & CEO

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